HEALTHSOUTH Crushes Earnings Estimates

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HEALTHSOUTH (NYS: HLS) reported earnings on Feb. 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), HEALTHSOUTH met expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share contracted significantly.

Gross margins grew, operating margins increased, net margins shrank.

Revenue details
HEALTHSOUTH reported revenue of $518.1 million. The 15 analysts polled by S&P Capital IQ expected to see revenue of $516.6 million on the same basis. GAAP reported sales were 0.5% lower than the prior-year quarter's $520.7 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.43. The 11 earnings estimates compiled by S&P Capital IQ forecast $0.33 per share on the same basis. GAAP EPS of $0.41 for Q4 were 94% lower than the prior-year quarter's $7.34 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 46.4%, 60 basis points better than the prior-year quarter. Operating margin was 19.3%, 120 basis points better than the prior-year quarter. Net margin was 9.7%, 13,990 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $527.7 million. On the bottom line, the average EPS estimate is $0.39.

Next year's average estimate for revenue is $2.12 billion. The average EPS estimate is $1.44.

Investor sentiment
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on HEALTHSOUTH is outperform, with an average price target of $25.80.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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